- US Q1 Unit Labor Costs rise 1.6% in the second quarter.
- US Dollar Index remains relatively steady after data, around 4-week highs.
The US Bureau of Labor Statistics reported that Unit Labor Cost (ULC) rose 1.6% during the second quarter, a reading below market estimates of 2.6%. ULC rose 3.3% during the first quarter (revised from 4.2%).
Nonfarm Productivity increased 3.7%, more than the 2% of market consensus. The 2.1% decline of the first quarter was revised to -1.2%.
Key takeaways from the report:
“Nonfarm business sector labor productivity increased 3.7 percent in the second quarter of 2023, the U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked decreased 1.3 percent.”
“The decline in hours worked is the first decline since the second quarter of 2020 and was the result of a 1.3-percent decline in average weekly hours; employment was unchanged.”
“From the same quarter a year ago, nonfarm business sector labor productivity increased 1.3 percent, reflecting a 2.6- percent increase in output and a 1.2-percent increase in hours worked; this is the first increase in the four-quarter productivity measure since the fourth quarter of 2021.”
“Unit labor costs in the nonfarm business sector increased 1.6 percent in the second quarter of 2023, reflecting a 5.5-percent increase in hourly compensation and a 3.7-percent increase in productivity. Unit
labor costs increased 2.4 percent over the last four quarters.”
Market reaction:
The US Dollar Index continued to trade around 102.70 after the release of US data that also included the weekly Jobless Claims report. Later on the day, the ISM Service PMI is due.
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